Is Ubiquiti Networks Inc (UBNT) a Good Stock To Buy?

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Because Ubiquiti Networks Inc (NASDAQ:UBNT) has witnessed a declination in interest from hedge fund managers, logic holds that there was a specific group of money managers that slashed their full holdings last quarter. At the top of the heap, Ross Margolies’ Stelliam Investment Management dropped the biggest investment of the 700 funds watched by Insider Monkey, comprising about $20.4 million in call options., and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund sold off about $7.7 million worth. These moves are important to note, as total hedge fund interest was cut by 2 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Ubiquiti Networks Inc (NASDAQ:UBNT). We will take a look at Hill-Rom Holdings, Inc. (NYSE:HRC), Boardwalk Pipeline Partners, LP (NYSE:BWP), Cedar Fair, L.P. (NYSE:FUN), and Cobalt International Energy, Inc. (NYSE:CIE). All of these stocks’ market caps are similar to UBNT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HRC 21 339896 -1
BWP 17 170194 2
FUN 10 242635 -2
CIE 18 800105 1

As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $388 million. That figure was $150 million in UBNT’s case. Hill-Rom Holdings, Inc. (NYSE:HRC) is the most popular stock in this table. On the other hand Cedar Fair, L.P. (NYSE:FUN) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Ubiquiti Networks Inc (NASDAQ:UBNT) is even less popular than FUN. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

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